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Guggenheim analyst John DiFucci downgraded software program large Microsoft to Promote from Impartial. He cited a deterioration in demand.
Patrick T. Fallon / AFP by way of Getty Photos
Guggenheim is getting extra pessimistic about Microsoft inventory on the danger of a slowing international economic system.
On Tuesday, analyst John DiFucci lowered his ranking on software program large Microsoft (ticker:
MSFT
) to Promote from Impartial, and established a brand new value goal of $212. He stated the agency noticed a deterioration in demand for software program from firms and small companies, in response to his checks.
“Whereas most traders see MSFT as a big secure enterprise that may climate any storm, it does have vulnerabilities, a few of which may very well be exacerbated by this macro slowdown,” he wrote.
In early buying and selling Tuesday,
Microsoft
inventory traded up barely to $240.18. Microsoft didn’t instantly reply to a request for touch upon the analyst notice.
DiFucci stated Microsoft has greater publicity to small and medium-size companies, who could fare worse than bigger corporations if the economic system enters a recession. Additional, he famous the corporate’s Home windows division accounts for greater than 20% of its earnings, which might get negatively affected by the softening in demand for computer systems.
The outlook for gross sales of private computer systems has been deteriorating. In response to IDC, worldwide shipments of PCs dropped 28% within the fourth quarter versus the prior 12 months, citing a continued unwind of the pandemic-era growth.
Microsoft’s Azure cloud-computing enterprise is one other danger space, the analyst stated.
“In a chronic macro slowdown and nobody is immune,” he wrote.
Write to Tae Kim at [email protected]